Market Update | February 21, 2024

 

U.S. LIGHT VEHICLE PRODUCTION REBOUNDED TO START 2024

January light vehicle production totaled 856,729 units, up 15.6% from December and up 8.0% from January 2023. This is the third consecutive month in which production increased on a year-over-year basis. Production increased for both cars and light trucks in January, climbing 13.0% and 16.1%, respectively. This was the highest January production rate since right before the pandemic in 2020.

 

Input Costs

Zinc pricing rebounded this week after hitting a 6+ month low last week.

  • Zinc pricing came in at $1.08/lb this week, up from $1.04/lb previously but is still below the 30-day average.

 

Spot iron ore pricing declined this week, sliding to $126/mt.

  • Spot iron ore pricing is down 2.5% from last week and is down 1.5% since last month.
  • Rising inventories and low steel mill profitability in China, combined with weaker steel demand in 2024, have negatively impacted iron ore pricing.

 

Met coal pricing continued to slide this week, currently down to $314/mt.

  • Met coal pricing is now down 0.5% from last week and down 5.7% from this time last month.

 

SUPPLY

U.S. raw steel production rebounded again this week and is now up for the third straight week.

    • U.S. steelmakers produced 1.720 million tons at a 77.5% utilization rate.

      • This is the third consecutive month in which production increased on a year-over-year basis.

    • YTD production is down 1.8% from the same timeframe last year.

 

U.S. preliminary steel import licenses for February (17 days) are up 16% compared to the same timeframe in January and follows a 17.4% increase in January from December.

    • Total licenses for flat rolled imports are up 6.6% compared to the same period in January.

 

Service center flat rolled inventories were at 4.284 million tons; up 2.4% from last year.

    • The y/y increase ended a string of 16 straight declines.
      • Despite the bump, inventories remain well below the 10-year Jan avg of 4.677 million tons.
    • The months of supply was down to 1.86 months, while days of supply slipped to 39.1 days.
    • Baring a sharp decline in shipment activity, there is no apparent inventory build at the service center level.

 

DEMAND

After slipping in December, U.S. light vehicle production rebounded to start 2024.

    • January light vehicle production totaled 856,729 units, up 15.6% from December and up 8.0% from January 2023.
      • This is the third consecutive month in which production increased on a year-over-year basis.
    • Production increased for both cars and light trucks in January, climbing 13.0% and 16.1%, respectively.
    • This was the highest January production rate since right before the pandemic in 2020.

 

 

This material, information and analyses (the “Content”) may include certain statements, estimates and projections prepared with respect to, among other things, historical data and anticipated performance.  Content may reflect various assumptions by Majestic Steel USA, Inc. concerning anticipated results that are inherently subject to significant economic, competitive and other uncertainties and contingencies and have been included for illustrative purposes.  Content is provided AS-IS.